In tandem with the positive equity market returns, the report states, the world economy will enjoy moderate economic growth in 2013. The report foresees slow growth in the U.S., fueled in part by a boost from "rebuilding and restocking that will follow" superstorm Sandy. Also expected to contribute to continued growth is "consistency in U.S. monetary policy" following President Obama's re-election and the president's stated intention of bringing the U.S. deficit down to a "more manageable level."

The report notes that corporate earnings remain positive: At the close of October, 63 percent of S&P 500 companies had surpassed their earnings estimates. The report forecasts flat earnings, however, for the next 12 to 18 months.

The report expects that equitiesin 2013 will remain a good value due to continuing positive dividend yields.

"Equities remains an attractive asset class compared to bonds, which are overbought (with similar yields to equities)," the report states. "Both money market and government bond yields are below dividend yields.

"To maximize value in our clients' portfolios, we continue to slightly overweight equities, focusing on yield and high-quality companies," the report adds. "In terms of geography, we continue to underweight the eurozone, where we anticipate disappointing growth."